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Wednesday, March 8, 2017

A Black Hole for the Poor --- Medicaid Under the GOP Bill

The new GOP American Health Care Act (AHCA) should be called
"Well, Anyway, It's Not Obamacare." Right from the start all the
random shreds of Republican ideas began with: anything but the ACA. Their Bill had
to be its negation. An antonym.A
void.And they have achieved it.The AHCA is a black hole into which they are
kicking any hope for achieving universal care. The Bill is a travesty on many
fronts, which we will address going forward.This article, however, focuses on Medicaid, where the foot of the GOP
Bill falls most heavily.

Medicaid in the
Good Old Days (and in Current Non-Expansion States)

So let's drift back to the past, where all the best
Republicans want to force us to dwell, and see what pre-ACA Medicaid had to
offer.The
original Medicaid is an entitlement program, set up in 1965 under Social
Security to cover low-income children and some adults. Medicaid rules varied widely
from state to state, but all were required to cover children under 5 at 133% and
school age children at 100% of the federal poverty level.Eligibility for parents and caretakers could
fall far below the poverty level. Examples from current non-expansion states
are 13% in Alabama, 15% in Texas, 19% in Indiana (Pence's home), and 29% in
Florida (Trump's home away from home).

Medicaid also covered pregnant women, elderly and disabled
individuals, and some parents, but excluded all other low-income adults.

In 1997, the Children's
Health Insurance Program (CHIP) was added to the program to cover kids from
uninsured, low-income households that were above the Medicaid poverty line. This
was a successful program and by the time ACA was implemented in 2013, eligibility
levels were at 235% of poverty level, and only 7% of children were uninsured. (The
rates, however, vary from state to state with over 12% of children still
uninsured in 7 southern states.

How Did Medicaid
Funding Work?

Medicaid
does not provide funding directly to individuals but reimburses doctors and
medical institutions for expenses qualified under Medicaid.Such costs are shared by the feds and the
states based upon a formula using state income data, so that poorer states receive
a larger percentage from the feds than wealthier ones. For example, New York's
share before Medicaid expansion was 50%, while Mississippi got $2.79 for every
dollar it spent. This system, while not perfect, allows for flexibility in case
of changing state needs (e.g., economic downturn, natural disasters, and
epidemics).

The current Medicaid program, including the Children's
Health Insurance Program (CHIPS), currently reaches 74 million people,
including about half of all pregnant women and 20% of all children.About 11 million people are enrolled in
Medicaid expansion states. The new bill will have an effect on all these
people, and not in a good way.

As of January 2017, 32 states had adopted Medicaid expansion,
under which they provide Medicaid coverage to all adults under 65 with incomes
below 138% of the federal poverty level – even those without children. It
standardized eligibility rules and provided additional benefits.

At this time, Medicaid and CHIP covers children in families with
incomes at least 200% of the federal poverty line, with a number of states
with expansion covering those at over 300%.

·Most research found positive impacts on access
to and affordability of care, utilization of services, and financial security

·Most research reported Improved self-reported
health following expansion, but more studies are needed on health outcomes.

The economic impact on the expansion states has also
suggested an improved health care system. Under
the ACA the federal government paid states with Medicaid expansion 100% of
the costs, which decreases over time but will hold steady at 90% in 2020.

Recent evidence has reported
positive impacts on multiple economic outcomes, including reductions in
uncompensated care costs for hospitals and clinics and positive or neutral
effects on employment and the labor market.

What's Going to
Happen Under AHCA (aka TrumpCare)

First, the option to cover Medicaid enrollees above the 133%
poverty level threshold will be eliminated.For children, this will go from $138% back to the poverty level. (In New
York for a family of four this goes from $33,534
to $24,300). Other
unfortunate changes include the repeal of the requirement for essential
health benefits. An extra 6% in funds that now goes for attendants who care for
Medicaid patients at home or in a community setting will also go away. And, no
surprise, Planned Parenthood for Medicaid patients is defunded.

So, here's the GOP carrot

States with expanded Medicaid will
still get the extra federal dollars for people who enroll before the end of
2019, However, the feds will provide 80% of costs not 90%, which is what it was
expected to be in 2020 under the ACA.

Those states that didn't opt in for expansion will get $10
billion over 5 years for safety-net funding.

And Here's the Giant Catch for Expanded States

So, the following is
important.This is how the GOP is going
to kick ACA Medicaid into the void:

People can stay
enrolled in expanded Medicaid programs as long as they don’t experience a gap
in coverage for more than a month.

Medicaid enrollees continuously move in and out of coverage
because of changes in their lives that bring them in and out of poverty. Under the new bill, once a state loses its enhanced
funding, people whose incomes nudge even temporarily above the eligibility
threshold(about $16,400) would lose
their Medicaid. So, for example, a
seasonal worker's income might rise above the threshold, and will remain too
high for more than a month. Under AHCA not only will that worker be unable to
re-enroll but he or she will lose access
to Medicaid permanently.

The large
majority of people on Medicaid in any case fall off after two years, and the numbers
decline steadily after that. This means that even in the states that keep
expanded Medicaid, eventually there will be no enrollees in the program.

And once the expansion enrollments have dissipated, the feds
will use the old matching rates, on average paying 57% of costs while states pay
43%.According to the Center
on Budget and Policy Priorities states that had expanded Medicaid and want
to continue benefits would have to pay 2.8 to 5 times more, which would mean
they would have to increase their share of the costs by at least $253 billion
over ten years.

And Then There Are
the Caps

Under the AHCA, as of January 2020 every state, even the
expansion states, will be paid on a per-beneficiary basis for all Medicaid
enrollees. The cap is calculated based on spending in 2016, and would rise
annually to match the growth in the medical care component of the consumer
price index.It's expected, however,
that the actual costs will rise by about 0.2% points faster than the capped amounts,
so over a decade the amount would climb to $116 billion. (This is over and
above the $253 billion expansion states would need to cover benefits). In
reality it would be even higher because states are expected to cover all costs
over the per capita cap. These could occur due to unexpected events, such an
epidemic, recession, or natural disaster or simply because of an unexpected
increase in residents.

States would once again determine their own eligibility
thresholds and benefits, and states who had opted for expansion but cannot
afford to carry their costs along, will most likely revert to the bad old standards,
typical of the non-expansion states. There, Medicaid
is limited
to parents with incomes up to 44% of the poverty line. Childless
adults over 21 who are not disabled, pregnant, or elderly are generally
ineligible for Medicaid, no matter how poor they are.In these non-expansion states, 2.6 million
adults have incomes above Medicaid eligibility but are not at the poverty level.
This makes them ineligible for exchanges
subsidies, meaning they fall through the cracks.

As an additional sad observation, the average lifespan of
people who live in states with expansion Medicaid is 80.1 years; in those who
don't it is 78,7(about the same as
people in the Maldives and the Czech Republic).African Americans who live in 13 of those 19 states do even worse, with life
spans under 76 years, on a par with Azerbaijan and Libya.

Conclusion

It is puzzling why the GOP would create such a punishing
bill, particularly since it would put the greatest burden on the poorest states
with the worst health care, mostly Republican states. Furthermore many of these
states, weirdly, refused the benefits of the expanded Medicaid, which would
have improved the lives of some many of their own citizens. It continues to be
the most important question for Americans: Why do we legislate so often against
our own best interest?

About Us

Carol Peckham has spent over 30 years in medical publishing. At the start of this career, she served as Publisher of Scientific American Medicine as a Vice President of Scientific American, Inc. After 15 years, she left to start her own company, Nidus Information Services, where she and her partner launched Well-Connected, a series of 103 in-depth white papers for patients, available in print and on the Internet. After 10 years, they sold their company, and subsequently joined Medscape, the professional arm of WebMD. Peckham served as Director of Editorial Development for another decade. She is now retired and living near Hudson, NY, where she has become active in encouraging universal health care.